Experts warn that housing and mobility problems could hamper Malaga's growth

Nuria Triguero

Malaga

Thursday, 26 September 2024, 18:47

Malaga's economy is growing at a good rate. In fact, more than expected for this year. The Colegio de Economistas - the professional body for economists in Malaga province - has raised its forecast for an increase in the province's gross domestic product (GDP) for 2024 from the 2.1% it predicted in May (its previous half-yearly report known as the 'Economic Barometer') to the 2.8% announced this week. This is four tenths of a percentage point more, which places Malaga one point above the Andalusian average and one tenth below the Spanish average. By 2025 these economists expect growth to accelerate and reach 3% in Malaga, above the national (2.1%) and regional (2.3%) averages.

However, just because the economy is advancing quickly does not mean it is doing well. There are some important imbalances in Malaga that are becoming more pronounced and could end up dragging down this upward trend. This is what the Colegio's dean, Manuel Méndez, flagged up at the presentation of their half-yearly economic report. He pointed out three specific problems: access to housing, insufficient mobility and water supply infrastructure. Three issues that, in his view, are becoming more serious in the face of constant population growth and which could "have a very negative influence" on the provincial economy.

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"There are bright lights and dark shadows in Malaga's economy. On the bright side, Malaga continues to lead Andalucía in terms of GDP, sign-ups to social security contributions and tourism. We also have a significant increase in the population." In contrast to this positive news, there is "an inflation rate of 3.4%, which is higher than the Spanish average and is mainly due to price tension in the services sector, and several issues that we must pay special attention to because they can have a very negative influence on us: the price of housing, which is not only an economic issue, but also a social one, transport infrastructure in the metropolitan area and the drought, with the desalination plants that have not yet started up and are not expected to materialise until 2027-28."

Méndez noted that the relevant governing bodies are "making efforts" to correct these shortcomings, but "they are not enough", in his opinion. It is necessary to "redouble" these efforts, "especially in the area of transport infrastructure, because today there are only intentions, there is nothing concrete", he stated in a critical tone. "With the demographic increase in Malaga now with 1,778,000 inhabitants it is necessary and fundamental, and we are almost too late for this population to be able to move freely around not only the provincial capital, but also the surrounding areas, and therefore good infrastructure in the wider metropolitan area is increasingly important," he stressed.

The new economic barometer report published by these economists raises the GDP growth figure in the second quarter in Malaga to 2.7% compared to 1.8% in Andalucía and 2.2% in Spain, which makes this province "leader in our region." Moreover, the report states: "The growth in the number of commercial companies, which amounted to 2,115 compared to 5,360 across Andalucía, means that we account for 39% of the companies created in our region and 7% of those created in Spain, validating the figures as showing economic leadership in our region."

On inflation the report says it "is decreasing, although not at the desired rate in our province that is presenting a significant downward resistance, a fact that does not occur in our area with Malaga presenting percentages above the Andalusian and Spanish average, currently standing at 3.4%."

In the labour market the active population grew by 2.27%, of which 87% are actively employed, that is an increase of 6.47% in the interannual variation rate. The unemployment rate stands at 12.5%. In terms of the number of workers signed up to social security, there was a 3.48% increase, reaching 729,883 in the second quarter and "all these figures are higher than the Andalusian and Spanish average."

Tourism continues to "present leading figures in Malaga", with year-on-year rises of 6.16% in visitors staying in hotel accommodation. That figure is above Andalucía (5.37%) and Spain (3.38%), albeit with weaker growth in domestic tourism compared to the overseas market. It should be noted that the report does not include data for July and August, which represent a change in the upward trend with falls in overnight stays and visitor numbers. "The hotel occupancy rate continues to be higher than in Andalucía and Spain, highlighting the strength of our tourism industry. The number of holidaymakers staying in tourist lets also increased in our province, almost double the growth of the Spanish average, and above the Andalusian average. Air passenger traffic is close to 10% year-on-year growth, representing 67% of visitors to our region."